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RIC's. Fixed income funds are RIC's that invest in corporate,
Government, and municipal bonds. Fixed income funds are also
subclassified into "taxable" and "municipal" RIC's. Petitioner's
subsidiary, FMR Co., is the investment adviser/manager for all
the RIC's in the Fidelity family.
Regulatory Background
Petitioner's activities in creating and managing RIC's are
governed by the Investment Company Act of 1940 (the 1940 Act),
ch. 686, tit. I, secs. 1 through 53, 54 Stat. 789-847, current
version at 15 U.S.C. secs. 80a-1 through 80a-64 (1994). The 1940
Act regulates the creation and management of RIC's, which are
separate investment companies under the 1940 Act. RIC's are
formed as either domestic corporations, partnerships, trusts, or
series within existing trusts. The activities of FMR Co. are
governed by the Investment Advisers Act of 1940 (the Advisers
Act), ch. 686, tit. II, secs. 201 through 221, 54 Stat. 847, 15
U.S.C. secs. 80b-1 through 80b-21 (1994), which regulates the
registration and activities of investment advisers. Petitioner's
activities in offering shares in the RIC's to the public are
governed by the Securities Act of 1933, ch. 38, 48 Stat. 74, 15
U.S.C. secs. 77a through 77aa, which regulate the registration
and issuance of securities.
Section 80a-8(a) of the 1940 Act requires any investment
company to register with the Securities and Exchange Commission
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